The head of restructuring giantZolfo Cooper expects
thousands of hedge funds to fold in 2009.

Simon Freakley told Accountancy Age that the company, which has
handled the administrations of stricken airline XL Leisure and furniture
retailer MFI, was preparing for a surge in activity in offshore tax havens.

Many of the hedge fund holding companies are incorporated in the Cayman
Islands and the British Virgin Islands, where Zolfo Cooper has a presence.

‘In the British Virgin Islands there’s something like 10,000 hedge funds
registered and recent commentary has suggested that as many as 4,500 will
close,’ he said.

‘If a court procedure is required, you have to be able to take the
provisional liquidation in Cayman or the BVI to be able to handle the activities
that may be indeed be located in the US or Europe.’

Freakley added that the financial turmoil had seen a lot of investment
banking staff applying for jobs.

‘We’re not just recruiting people with restructuring and insolvency
experience, we’re recruiting those with transactional and financial modelling
skills because we need those skills in house. ‘